Human beings and animals can deiodinate the less active thyroid hormone, thyroxine, T4, to the more active hormone, triiodothyronine, T3. Such monodeiodination of T4 has been demonstrated in homogenates and microsomal fractions of liver and kidney, and the enzyme responsible for the catalysis of conversion of T4 to T3 by removal of the 5'-iodine atom from the phenolic (outer) ring of T4 has been called thyroxine-5'-deiodinase. This process of metabolic conversion of one hormone to another, more active one adds another factor to the range of homeostatic mechanisms producing euthyroidism. The "peripheral" non-thyroidal enzymatic formation of T3 from its precursor T4 is considered to be a major source of circulating T3, although of course some T3 is secreted from the thyroid gland. We have recently isolated a microsomal fraction from rat thyroid gland that has a very active thyroxine-5'-deiodinase activity, which probably accounts for the earlier reported ability of rat and dog thyroid glands to deiodinate T4 perfused into the gland's arterial blood supply, and of rat thyroid minces and lobes to convert added labeled T4 to T3 (albeit in very small amounts). Ours is the first isolation of the thyroid enzyme in a form that allows a determination of its activity and kinetic properties in a quantitative manner. The possible contribution of the thyroid gland to total body T4 to T3 conversion has often been ignored. We hope to be able to make an estimate of this contribution in the rat. We shall look for the thyroidal deiodinase in human thyroid glands, both normal and abnormal.